PensionFunds, Transformation
Redefining pension funds: administrative challenges
Spanish pension funds are undergoing an unprecedented transformation thanks to the implementation of new regulations comprised of Law 12/2022 and Royal Decree 668/2023, generating new challenges and opportunities in their marketing.
The new regulations have created a more attractive environment for new participants thanks to the flexibility of pension plans, increased contribution limits, and the possibility of early withdrawal.
While these opportunities clearly promise a bright future, they also present administrative challenges for fund managers.
In this second part of our blog on pension funds, we will explore each of the challenges required to navigate this new landscape.
Management Challenges
As the pension plan market expands and diversifies, asset managers face a series of operational requirements that demand attention and adaptation.
1. Increased number and diversity of participants and the variety of available plans. The growing variety of participants and the multitude of available plans translate into greater complexity in managing documentation, tracking contributions, and ensuring regulatory compliance.
As a result, asset managers will need to implement more sophisticated systems to efficiently manage this diversity.
2. Adaptation of commercial offerings. The introduction of new models such as Publicly Promoted Employment Pension Plans (PPAS) and the advantages associated with pension plans, including the new early redemption benefit, requires asset managers to adjust their marketing strategies and effectively communicate the long-term benefits of these products.
This entails a careful review of commercial strategies and clear, persuasive communication with potential clients.
3. Managing Redemption Requests. The possibility of redemption starting in the tenth year presents additional administrative challenges in terms of managing redemption requests.
Asset managers must ensure they have efficient and robust processes in place to handle these requests in a timely and accurate manner, guaranteeing a satisfactory experience for participants.
4. Adapting to Non-Discrimination and Integrating Plans into Corporate Transactions. The need to guarantee non-discrimination and the integration of pension plans into corporate transactions adds complexity to the responsibilities of asset managers.
This entails reviewing and adapting internal policies and operating procedures to ensure regulatory compliance and fair treatment for all participants.
In summary, the development of the pension plan market opens new perspectives, but at the same time poses administrative challenges that require close attention and adaptability from fund managers.
The key to success in this new pension plan landscape lies in proactively adapting to regulatory changes. This involves improving administrative systems and internal processes to ensure efficient management and compliance with new regulations.
Furthermore, clear communication with clients and the implementation of robust solutions that streamline operational processes are essential.
How can ARENA help?
As specialists in technology and BPO, we offer comprehensive solutions to address the challenges that asset managers face.
From automating administrative processes through ad hoc applications for file management to managing processes for regulatory compliance, both services are designed to alleviate the operational burden and allow asset managers to focus on their core business: providing efficient and transparent service to their clients.
Partnering with ARENA is a strategic step for asset managers seeking to prepare for and successfully address the challenges of this changing and dynamic pension fund environment.
Our experience and specialized talent enable us to offer solutions tailored to the specific needs of each client with a high level of excellence.
At ARENA, we are committed to helping asset managers achieve new levels of efficiency and performance in their daily work.
